Ether is struggling to break past the critical $3,500 resistance level despite record-breaking fund flows into exchange-traded funds (ETFs), raising uncertainty about its immediate future.
December was a big month for Ether, with ETFs amassing more than $2.1 billion in net flows, more than doubling the figures from the previous month.
“The current decline in Ether’s price presents unique trading opportunities,” Farside Traders wrote, noting the dynamic nature of the crypto market.
This article examines Ether's recent ETF flow record, its implications on price dynamics, resistance levels, and trader strategies in volatile market conditions.
Record ETF Flows Not Enough to Push Ether Past Resistance
Ether ETFs saw a major investment surge in December 2024, with net flows of $2.1 billion. This surge suggests increased institutional interest, but Ether’s price still remains below the critical $3,500 level. Analysts are cautiously optimistic about Ether’s future amid these flows, with some speculating that these flows could be a sign of a potential reversal.
Trading Strategies Between Market Trends and Volatility
The strong demand for Ether ETFs presents a paradoxical situation; despite the increased investment, the price of Ether has fallen by 8.4% in recent months and is currently trading at $3,353. Traders are pursuing different strategies in these challenging market conditions. Notably, one trader recently correctly predicted a price drop by taking a position on Ether with 50x leverage, making over $1.1 million in profit.
Can Ether Break Through the $3,500 Resistance?
The $3,500 barrier is a critical threshold for Ether. Breaking this level could trigger a massive wave of liquidations in short positions. According to CoinGlass data, a rally past this point could trigger more than $1 billion in liquidations across all exchanges. The market is being watched closely, especially due to the expected changes in financial conditions in early 2025.
Technical analysts suggest that Ether is in a potential breakout phase. According to analyst TMV, some accumulation models show the potential for Ether to rally towards $4,400 in the first quarter of 2025. However, caution is also emphasized; if prices fall below $2,914, bullish trends could quickly fade and Ether’s volatile nature could return to the fore.
Market sentiment is generally positive, with many in the crypto community predicting that Ether could rise above $4,000 by mid-2025. This positive sentiment is supported by expectations that new political leadership in the US will improve market conditions, while the gradual increase in ETF investment is seen as a signal of a more stable price trend for Ether in the long term.